Response to WSJ Article

In last week’s WSJ article about Health Savings Accounts and Consumer-Directed Health Care, “Health Savings Plans Start to Falter,” Vanessa Fuhrmans addresses some important points; however, she misses the mark on her conclusions.

The headline and conclusions throughout the article suggest that HSAs are beginning to “falter” based upon three pieces of evidence. First, she suggests that the growth of HSAs has been sluggish since the law became effective January 1, 2004. Second, she touches lightly, with little evidence, on the net affect that HSAs and CDH have on effecting the change in behavior by health care consumers. Third, Ms. Fuhrmans quotes both a benefits consultant and an industrial-research design consultant (worker) to illustrate overall dissatisfaction with the HSA products and ability to competitively price shop for value in health care without taking into consideration the typical innovation cycle that follows the emergence of all new products and services.

Ms. Fuhrmans’ analysis and resulting conclusions are likely not based on the most recent HSA growth data. She quotes the Kaiser Family Foundation study that showed a 15% increase in the number of HSAs between 2005 and 2006. However, a more recent AHIP (American Health Insurance Plans) study published in January 2007 shows a 77% increase in the number of Americans covered by HSAs during the period from March 2005-March 2006, and an additional 30% increase by January 2007.

As emphasis, consider that the growth of CDH and HSAs is significantly more robust than the growth of HMOs and 401(K) plans, other employee benefit vehicles introduced in the 1970s. In particular, 401(K)s, which became law at the end of the decade, experienced a slow adoption rate for the first several years, then accelerated as companies became more familiar with the plans and service providers grew increasingly adept in the space. It took 20 years for 401(K)s to capture one-third of the marketplace. Many, including Forrester Research, predict CDH will capture one-third of the health care market by 2012 – less than 9 years after HSAs became a viable alternative for health care consumers.

Click to view: Active 401(k) Participants/Total U.S. Private Employment

Ms. Fuhrmans downplays the fact that employees with HSAs have reduced their spending on unimportant and unnecessary health care, which is perhaps the most important concept surrounding HSAs and CDH. She also fails to mention rapidly emerging 3rd party evidence illustrating this fact. In a Harvard Medical School study published in the March 14, 2007, Journal of the American Medical Association, researchers studied more than 68,000 people and determined that people with high-deductible plans (a pre-requisite for HSAs) were 25% less likely to have repeat visits to the ER for non-severe conditions.

Despite the fact that insurance companies typically collect less premium dollars from HSA-related high-deductible plans than for traditional plans, many appear to be bullish on these types of policies, not only because consumers are using less non-necessary care, but because they are using more preventative care. A recent Aetna study noted that people with HSAs are more likely to take the proper medications for chronic diseases such as asthma, and more likely to get cervical cancer screening exams than patients with traditional plans.

Ms. Fuhrmans also denigrates the current CDH and HSA market offerings by referring readers to a benefit consultant from Towers Perrin and an employee that have both had less than rewarding experiences with the plans and products. Her point is well taken. CDH has a lot of progress to make as it works to develop technologies to make it easier for consumers to manage the financial side of health care. It is appropriate to look at the early days of HMOs, 401(K)s and other new products or services to understand that sometimes it takes awhile to work out the bugs.

As HSA companies gain experience and better consumer tools become available to provide comparison shopping, the experience will undoubtedly improve for people. While far from perfect, HSAs and CDH are making a lot of headway addressing some of the most difficult problems facing American health care. I believe that Ms. Fuhrmans’ article fell short in making that point.

On The Road... Again...

Beginning today and over the next few weeks, I’ll be traveling throughout the country to meet with select brokers, discussing CDH and HSA’s. I’m looking forward to the trips – even though they take me away from home and family – because I love hearing about brokers’ experiences in the field and working with them to ensure that HealthEquity™ is the best and most fitting option available.

Here’s where I’ll be:
June 18 – Phoenix - Scottsdale Marriott at McDowell Mountains
June 20 – Minneapolis - The Metropolitan Ballroom
June 22 – Speaking at AHIP at the Wynn Hotel, Las Vegas
June 28 – Tampa - Marriott Westshore
July 10 – Seattle
July 12 – Portland
July 17 – Houston
July 19 – Dallas

Articles in Post and WSJ on HSA

I’ve seen several recent articles about consumer driven health care in newspapers and online. This past week, there were notable mention in the Washington Post and the Wall Street Journal. Some of the articles, including the Post and WSJ were more factual than others, but overall, I’m encouraged by the coverage. People are talking about consumer driven health care, about the opportunity for consumers to research medical costs and quality and demand better care at better prices.

A recent initiative from the Department of Health and Human Services (HHS) promoting transparency as a vehicle for change. Transparency allows patients to “shop” for the best price and quality of their health care services, allowing them to make informed, empowered decisions about their medical treatments. According to HHS, transparency will lead to change to which I whole-heartedly agree.

You can read more about it here:
http://www.hhs.gov/transparency/general/#change